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2006 (8) TMI 461 - AT - Central ExciseDemand of duty - cost recovery charges and facility charges appears to be erroneous - Valuation of final products - Penalty imposed - CEGAT passed the Final Order, remanding the case for de novo adjudication - HELD THAT:- A demand of Rs. 6,63,30,535/- has been made on the ground that the payment made by the appellants to JVSL for the power received by them from JTPCL does not represent the real cost and, therefore, the difference between the real cost and what has been paid by the appellants represents additional consideration. The CEGAT has actually remanded the matter to the Commissioner to examine the issue in the light of all the evidences produced by the appellant. The appellant has shown that the price paid by them to JVSL is in fact much higher than the price charged by KEB. The appellant has actually shown through documents that they had adopted the rate of Rs. 3.05 per unit for the period from 1-7-1999 to 5-1-2000 and Rs. 2.65 per unit thereafter. However, the KEB itself purchased power from JTPCL at the rate of Rs. 2.60 per unit pursuant to formal Orders and Notifications issued by the Government of Karnataka. This is definitely sufficient to accept that the power rate adopted by the appellant reflects the power cost. The Commissioner has not at all examined these documents and has adopted some weighted average cost of power as indicated in Annexure III of his findings. In our view, there is no case for demanding duty by taking a higher value for power when KEB itself was purchasing at a lower value from JTPCL. Therefore, the demand of Rs. 6,63,30,535/- is not sustainable. Thus, it is seen that the entire demand of Rs. 12,62,13,125/- on account of (a) Facility charges, (b) MTOP Charges, and (c) Electricity charges is not sustainable. Hence, the demand is set aside. The consequence of such a decision is that the penalty under Section 11AC is also not sustainable and the same is set aside. Hence, interest u/s 11AB, penalty on M/s. JPOCL under Rule 173Q(1) and the penalties under Rule 209A on (a) Shri Sajjan Jindal, Chairman, JPOCL (b) Shri Indarjit Mookerjee, Non-Executive Director (c) Shri Raaj Kumar, Managing Director and (d) Shri V.S. Kumar, General Manager (Finance) and Company Secretary are not sustainable. In fine we allow all these appeals and set aside the OIO.
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